Aside from the reference in the release notes the only documentation I've seen on this feature was in the Getting Started with VMware Player (PDF) on page 15 (Linux Command Line Installation Options). However while the documentation shows this is an option on a Linux Host it doesn't show it as an option on a Windows Host! I tested this on a Linux Host and sure enough, have a look at the image below. BTW I did try on a Windows Host using the same syntax and it didn't work.
(Click image to enlarge.)
Message was edited by: WoodyZ - I forgot to mention that IMO this is pretty much a useless feature since a virtual machine can be created manually in a text editor and there are third party tools that can do it as well along with creating a .vmdk too. There are also virtual appliances available for free that can be downloaded without the menu option and one can repurpose them and install a different OS. So while it would stop some users it certainly wouldn't stop them all! 